1. Subject of the contract

The Sellers have sold and the Buyers have bought the equipment hereinafter referred to as the "goods" on terms FOB.

2. Prices and total amount of the contract

The total amount of the contract is... The prices are firm for the duration of the contract, not subject to any alterations and understood to be FOB...

3. Delivery dates

The equipment specified in clause 1 of the present contract is to be delivered complete as follows: ...

By the time stipulated the equipment is to be manufactured in accordance with the contract conditions, tested, packed, marked and delivered FOB...

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4. Penalty

If the delivery date stipulated by the Contract is not observed, the Sellers are to pay to the Buyers penalty at the rate of ...% of the value of the equipment delayed for each commenced week for the first four weeks of delay.

The rate of penalty is not subject to alteration by arbitration.

5. Payment

Payment for the delivered equipment is to be effected in the following way: ... per cent of the value of the completely delivered equipment to be paid within … days upon receipt by the Buyers of the following documents: ...

6. Guarantee

The Sellers guarantee:

a) that quality of the goods is in full conformity with the Contact conditions;

b) that the delivered goods correspond to the highest standards existing in the Sellers' country for the goods in Question.

7. Packing and marking

The goods are to be shipped in export seaworthy packing suitable for the type of the goods to be delivered

8. Export licence

The Sellers will take care of and bear all the expenses connected with obtaining the necessary licence for the exportation of the goods under the present Contract.

9. Force majeure

The parties will be released from their responsibility for partial or complete non-execution of their liabilities under the Contract, should this non-execution be caused by the circumstances of force majeure, namely: fire, flood, earthquake.

10. Insurance

The Buyers are to take care of and to cover expenses for insurance of the goods with ... from the moment of their despatch from the Sellers' works up to the moment of arrival at the Buyers' works.

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11. Other conditions

All the enclosures to the present Contract are to be considered its integral part.

12. Legal addresses of the parties

Sellers

Buyers

The present Contract is drawn up in the English and Russian languages in 2 copies, one copy for each Party, both texts being equally

valid.

The Contract enters into force on the date of its signing.

Enclosures:

Sellers: Buyers:

Answer the questions:

1) What clauses are sure to be included into any contract?

2) Is penalty clause necessary in any contract?

3) If you were to conclude a contract with an overseas buyer, would you include insurance clause? Why (not)?

4) Why do contractors usually include force majeure clause?

TEXT

To make a contract you first have to negotiate it. What does it mean? What makes a successful negotiator?

What do you think? Rank the following advice from the most important (1) to the least important (10):

How to be a good negotiator

• try to get on well with your opposite number

• use emphatic language

• show respect for your opposite number

• make suggestions to resolve disagreement

• have clear objectives

• be determined to win

• say "I don't understand", if this is the case

• listen carefully

• always compromise

• discuss areas of conflict

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Now read the text and answer the questions that follow.

SOME HINTS ON NEGOTIATING

PREPARATION

• Planning: Make sure you prepare properly. The less you prepare, the more you will be at a disadvantage and the less likely you will be to achieve a satisfactory outcome.

• Research: Try to find out as much as you can about your opposite number and his / her business. Use the resources of a business library and/or talk to your business contacts.

• Objectives: Try to take a long-term view and decide on a range of objectives so that you can be more flexible and offer more alternatives during the negotiation itself. Remember you are looking for a win-win situation of benefit to both parties, thus paving the way for further deals in the future.

• Limits: Decide what your sticking point(s) must be and why. Knowing your negotiating limits and their reasons will help you negotiate more confidently and comfortably.

• Strategy: Plan your negotiating strategy carefully, taking into, consideration the personality and position of your opposite number, as well as your own strengths and weaknesses.

TECHNIQUES

• Rapport: Try to establish a good rapport with your opposite number from the moment you first meet, whether or not you already know each other. Some general "social talk" is a good ice-breaker and bridge-builder in this respect.

• Parameters: Confirm the subject / purpose of your negotiation early on and try to establish areas of common ground and areas of likely conflict before you move on to the bargaining / trading stage.

• Listen! Listening attentively at every stage of your negotiation will help to avoid misunderstanding and create a spirit of co-operation.

• Attitude: Be constructive not destructive - treat your opposite number with respect, sensitivity and tact, and try to avoid an atmosphere of conflict. This will create a feeling of harmony and goodwill, which should encourage a willingness to compromise and ultimately lead to a productive negotiation.

• Approach: Keep your objectives in mind — and try to keep a clear head. This will help you to concentrate on your key points. Try to resist, the temptation to introduce new arguments all in time. Use the minimum number of reasons to persuade your opposite number, coming back to them as often as necessary.

• Flexibility: Be prepared to consider a range of alternatives and try to make creative suggestions for resolving any problems. Be prepared to make concessions and to compromise, if necessary, to avoid deadlock — but don't be pushed beyond your sticking point.

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• Review: Summarise and review your progress at regular intervals during the negotiation. This will give both parties a chance to check understanding — and, if necessary, clarify / rectify any misunderstandings.

• Agreement: When you have reached agreement, close the deal firmly and clearly. Confirm exactly what you have agreed — and any aspects / matters that need further action.

• Confirmation: Write a follow-up letter to confirm in writing the points agreed during your negotiation and clarify any outstanding matters.

LANGUAGE

• Simplicity: Keep your language simple and clear. Take your time and use short words and sentences that you are comfortable with - there is no point complicating a difficult task with difficult language.

• Clarity: Don't be afraid to ask questions if there is anything you don't understand. It is vital to avoid any misunderstandings that might jeopardise the success of your negotiation.

Answer the questions:

1. Do you agree with all the hints given in the text? Could you add your own advice to a negotiator?

2. Explain the meaning of the following words used in the text: to take a long-term view; to pave the way; sticking point; good rapport; deadlock

3. What could be a good ice-breaker / bridge-builder at a

negotiation?

4. What could jeopardise the success of a negotiation?

Is there any new information for you in the text?

DISCUSSION

1) Work in group. You are a team preparing a project contract with an overseas buyer. Your objective is to sell a large consignment of household equipment. What clauses will you include into your contract? Let every student draw a certain clause. Sum up the results in a contract.

2) What traits of character are essential for a good negotiator and how they will help you to succeed in negotiation?

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UNIT 5